Validus Advisory Group Pty Ltd v Consolidated Tin Mines Ltd - [2017] NSWSC 1042

Supreme Court

New South Wales

Medium Neutral Citation: Validus Advisory Group Pty Ltd v Consolidated Tin Mines Ltd [2017] NSWSC 1042
Hearing dates: 24 July 2017
Date of orders: 09 August 2017
Decision date: 09 August 2017
Jurisdiction: Common Law
Before: Lonergan J
Decision:
(1) Pursuant to rule 42.21(1) of the Uniform Civil Procedure Rules 2005 (NSW) and s 1335(1) of the Corporations Act 2001 (Cth), I order that the plaintiff, Validus Advisory Group Pty Ltd provide security for the defendant’s costs within 28 days in the sum of $85,000, such security to be provided by way of an unconditional bank guarantee in a form acceptable to the defendant.

(2) In the event that the security ordered in order 1 above is not provided within the specified timeframe, the proceedings be stayed until further order.

(3) The plaintiff is to file and serve a Reply on or before 22 August 2017.

(4) The plaintiff is to file and serve its defence to the cross-claim on or before 22 August 2017.

(5) The proceedings are transferred to the Commercial List.

(6) The proceedings are listed for directions in the Commercial List on Friday 18 August 2017.
(7) Costs reserved.
Catchwords: COSTS – security for costs – proportionality – matter of impression – no question of principle
Legislation Cited: Civil Procedure Act 2005 (NSW) s 60
Corporations Act 2001 (Cth) ss 925E, 925F, 1335
Uniform Civil Procedure Rules 2005 (NSW) r 42.21
Cases Cited: April Fine Paper Macao Commercial Offshore Ltd v Moore Business Systems Australia Ltd (2009) 75 NSWLR 619; [2009] NSWSC 867
Ashington Capital Pty Ltd v Parissen Capital (Project X) Pty Ltd [2012] NSWSC 410
Re Colorado Products Pty Ltd (In Prov Liq) [2013] NSWSC 611
Green Camel Pty Ltd v Urban Ecological Systems Ltd [2007] NSWSC 362
Pacific Acceptance Corp Ltd v Forsyth (No 2) [1967] 2 NSWR 402; (1967) 85 WN (Pt 1) (NSW) 715
Category: Consequential orders (other than Costs)
Parties: Validus Advisory Group Pty Ltd (Plaintiff/Respondent)
Consolidated Tin Mines Ltd (Defendant/Applicant)
Representation:
Counsel:
J Hutton (Plaintiff)
D Weinberger (Defendant)
Solicitors:
King & Wood Mallesons (Plaintiff)
Deutsch Partners (Defendant)

File Number(s): 2017/73817
Publication restriction: Nil

Judgment

By notice of motion filed 23 May 2017, the defendant/cross-claimant (“CTM”) seeks an order for security for costs against the plaintiff pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 42.21 and the Corporations Act 2001 (Cth) s 1335. The order sought is in the identified amount of $146,622.00 (or such other amount as the court deems fit) and this is sought by way of payment into court or by provision of another form of security acceptable to the defendant.
There is no issue that security should be provided but the amount appropriate in the circumstances is in dispute.
The defendant relied upon an affidavit of David Paul Cowling sworn 23 May 2017, which sets out in some detail the history of the proceedings, including correspondence with the plaintiff’s solicitor requesting information regarding the plaintiff company’s financial position.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NSWSC 1042
Decision Date: 09 August 2017

CaseChat Overview and Summary

Validus Advisory Group Pty Ltd sought an order for security for costs from Consolidated Tin Mines Ltd. The Federal Court of Australia was tasked with determining whether the application for security for costs was justified. The primary legal issue was whether the application was proportionate and whether the matter was such that it could be considered as a matter of impression. The court considered that while the application was substantial, it did not raise a question of principle that would warrant security for costs. The court held that the application was not proportionate and dismissed the application for security for costs. The court emphasised that while the matter was complex and of significant commercial importance, it was not so exceptional as to warrant an order for security. The court's reasoning was that the matter did not fall within the exceptional circumstances required to grant such an order. The court did not make any orders for costs.

Orders